Innes Is Reading

Sunday, November 23, 2008

This election, 2008, really is going to turn out to be a watershed event. Either we as a country will turn back the most serious run at overturning our presumptive reliance on free, open markets and self government; or we will take the fatal steps over the point of no return and walk into the narcoleptic dream world of a Euro-welfare state.

With our economy in crisis, there are so many temptations for the average citizen to go soft and turn to government for aid and solace. The age cohort that overwhelmingly supported the Obama-phenom, 18-29, has never seen a deep recession, and has the idea that robust growth with little inflation is the default position. The connection with lower taxes and less onerous regulation with the sterling economic performance we have had over the last two decades and more has been conceptually severed in the minds of most Americans. Thus, talk of the salutary effects of "tax cuts for the rich" and laying conclusive blame for the mortgage debacle on "lack of regulation" have become settled consensus views.

In light of the sudden and momentous--even world-historical--move by the Bush administration to socialize wide swaths of the banking and insurance industries, many voters are now ready to accept huge government intrusions and outright takeovers in the midst of this slow motion catastrophe. In the formulation of history as first tragedy and then farce, we will witness, in all likelihood, a farcical reenactment of the very sorts of government solutions FDR shoved into the American way of life, and which Amity Shlaesshows conclusively actually made the depression of the 1930's worse. Obama's solution for the looming unemployment right around the corner? Not aid to the private sector in the form of tax cuts and favorable monetary policy, but the ramping up of huge CCC and WPA style public works projects, financed with public debt, along with the takeover of the auto industry. "We owe it to ourselves" was an old Rooseveltian/Keynsian justification for government spending what it does not have.

I suspect that a lot of the free capital being shaken loose in the profit-taking sell-offs on these market run-ups will be fleeing to better climes. Hong Kong and Singapore, to mention just two, are set to reap an investment boom as tax friendly jurisdictions benefit from the follies sure to flow from a Democrat choke hold on all three branches of government. Our only hope is that this hard left turn runs us immediately into the ditch; if it takes too long for the reality to become apparent, we are doomed to a future where we're all Europeans. (See Randall Hoven's excellent "3 Scenarios for the Obama Years: The Good, The Bad and The Ugly")

But, as a very old saying has it, "who's going to pull the wagon when we all want to ride?" Without the enormous engine of economic growth that America uniquely provides, with our free economy and faith in capitalism, the socialist hammocks of Europe cannot be paid for, nor can the defense umbrella we provide the whole world. Witness the pathetic response to these Somali pirates in the Gulf; in the absence of American power and will, what's to stop them from franchising across the globe?

We are going to be a lot poorer and a lot more threatened than we ever imagined possible, unless enough people come to their senses quickly enough. The narcotics of leftism are being pushed at vulnerable people with little will to resist, and we are at risk of becoming a nation of addicts, willing to sell anything or anyone to maintain the sleepy cocoon our would-be overmasters have designed for us. Weak and soft, with no conception of self-reliance, looking to government for guidance and sustenance: imagine what the stout-hearted revolutionaries of 1776 who spilled their blood over the loss of their rights as Englishmen would say if they could see the decadent, slouching, addict-like mien of modern Americans.

We owe it to our forebears, and our posterity, to stop the sleepwalk into the narcotic oblivion the socialist drug dealers of the New New Deal have laid out for us. Just say no.

2 comments:

Let's take your latter point first. Read this sentence and think about it for a moment. "India, which is planning to send four more warships to the Gulf of Aden, has already conveyed to Somalia that it will use all necessary means to fight pirates who have targeted merchant ships passing through one of the world's strategic shipping lanes off the coast of Somalia." India providing comprehensive protection for shipping in the Gulf of Aden is astounding. I'm old enough to remember the handwringing over starving Indians and the massive amounts of PL-480 food from the U.S. to prevent famine. And where is the world's policeman now? Frankly, morally conflicted, emotionally exhausted and, yes, broke. We have reached the end of the era of U.S. power projection around the world. We just don't know it yet.

Your first point about how the youth of the U.S. know nothing but comfort and endless material goods has certainly come to an end. Who will "get us out" of this mess. Frankly, we are not "doomed to a future where we're all Europeans" because we and the Europeans are doomed to be participants in the coming "End of the Welfare State." Our combined personal-corporate-government debt/GDP ratio was already at amounts never seen in U.S. history. Prior to the current mess, and the addition of $7.5 trillion, total debt stood at $40 trillion, or 3.5 time annual GDP. Now, add to that the entitlement unfunded liabilities coming due beginning in 2010 and you add up to $100 trillion. That's a big number; in fact it's a debt of $333,333 per man, woman and child in the U.S. To illustrate this if $1 could buy a 1 second journey back in time, $100 trillion would take you back over 3 million years into the past.

We as a nation are on a ship in stormy seas, standing on the railing looking down, with an anchor around our collective necks. How can this debt be paid off? In fact, how can it be reduced without entering into a period of rather severe economic austerity? Can we just continue to roll over the debt, and thus increase the amount, into the future? If so, then who is going to buy these debt instruments, the natives of New Guinea? I simply can't see a path out of this. But it certainly doesn't appear we'll have much time to spend on European socialism track to oblivion.

johnsal,I agree that the picture is dire; I don't think it absolutely hopeless however. In my more pessimistic moments I admit to thoughts very much like yours. With renewed will and the right policies, the economic miracle that is America can still run a long ways, and pay for a lot mistakes. On the other hand, we are not invincible, and a series of serious errors or deliberate sabotage will take us into the sort of total government control that the Left dreams of. And in that case youre right--a socialist state cannot last, at this late date. But then surely some form of free market capitalism would begin to sprout anew, however long it might take. Maybe a Dark Ages redux is on tap. harold

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